Yahoo reported its financials for Q1 2012, with a slight increase in net revenue, which was $1.077 billion, up 1% year-over-year. However, its income from operations declined to $169 million, a 11% decline over last year. While its display ad revenue saw a 4% decline, its search revenue was up 8%.

Despite the decline in operating income, Yahoo’s net income actually jumped 27%, primarily because of earnings due to its equity interests in Alibaba and Yahoo Japan, which are currently valued at more than its actual operations.

Anyway, Yahoo plans to focus on its core digital content business in the coming days, and hopes to better monetize its massive audience. It has established a new structure around three groups – Consumer, Technology and Regions – bringing resources closer to users and advertisers.

It has also laid off a significant portion of its total workforce, to cut costs and save nearly $375 million in the next year.

In the last couple of weeks, it also sued Facebook in the hopes of making a quick buck before its IPO, and is looking to monetize its stake in Alibaba.

Yahoo also announced that it will be shutting down nearly 50 products that don’t contribute meaningfully to its revenue, as part of its restructuring effort. Besides its media content and social endeavors, it will also try to leverage its vast troves of user data to focus on its commerce business and generate additional revenue by providing better ROI to advertisers.

Scott Thompson is moving fast to create a new, leaner, meaner Yahoo. Whether or not his bets pay off is something we’ll know only in the next couple of years.